Should Florida Scrap PIP Auto Insurance and Become and At-Fault State?

Back in the 1970s, lawmakers in Florida sought to reduce the burden that constant car accident lawsuits imposed on the courts. That’s when they devised a system of no-fault benefits that every driver was required to purchase, called personal injury protection benefits, or PIP insurance. It’s intended to serve as a basic level of medical coverage for individuals who are injured in car crashes – no matter who is at-fault.

The law requires drivers to buy a minimum of $10,000 in PIP protection, and only if their damages exceed that amount or if the injuries are debilitating, permanent or scarring can those injured seek compensation outside of that system, per F.S. 627.736. Drivers here also aren’t required to buy bodily injury liability insurance (though it’s usually a good idea).

But now, legislators say they are going to be rethinking Florida’s PIP no-fault auto insurance this spring. A study commissioned by state leaders shows that if the PIP system were tossed, drivers would save an average of $80 on their policies. That doesn’t sound like a ton, but of course Florida has some of the highest auto insurance rates in the country and we’ve also got one of the highest rates of uninsured drivers – 1 in 4. Meanwhile, the cost of PIP benefits has soared in recent years, climbing 14.4 percent between 2013 and 2014 and then again by 25.7 percent between 2015 and 2016.

So what lawmakers are proposing is to do away with the PIP structure and join the other 38 “tort states” that require the at-fault driver to pay up if they are the one who caused the damage. However, there are some skeptics.

First, all but one of those 38 states has some type of auto insurance regulation that requires drivers to carry bodily injury liability coverage. Lawmakers are proposing if we do the same here in Florida that the coverage should be a minimum of $25,000 per person and $50,000 per crash. However, that means of course that drivers are going to be trading off one form of monthly insurance premium for another, and there are questions about whether that would actually save drivers any money.

The other concern is that it’s going to increase the number of car accident cases that are taken to court. If Florida become an at-fault state, there will no longer be that $10,000 threshold for accident claims. Sure, some of these cases will be handled via settlement agreements so that claims never make it to the litigation stage, but it’s plausible we’ll be seeing an increasing number of cases in court.

Health care providers are staunchly opposed to the repeal of PIP, citing concern about the cost burden being shifted to them. If drivers are no longer required to carry PIP and they don’t have health insurance, they’ll be relying on the hospital to provide emergency and intensive care treatment, even though they actually can’t afford it and don’t have that $10,000 cushion from PIP. By one estimate, the state has approximately 2.6 million residents who lack any form of health insurance.

On the other hand, certain settlements might be obtained more quickly because plaintiffs won’t have to show they have suffered some type of permanent or profound injury, as is currently required to collect compensation.

Call Freeman Injury Law — 1-800-561-7777 for a free appointment to discuss your rights. Now serving Orlando, West Palm Beach, Port St. Lucie and Fort Lauderdale.